IGA operator Metcash says customers have stayed loyal to the grocery retailer since flocking to the company’s stores during the pandemic years, helping to push the business to record sales and earnings for its financial year that ended on April 30.
The company revealed to investors on Monday morning that it had booked a 6.2 per cent jump in group revenues to $15.8 billion, while net profits accelerated by 7.6 per cent to $259 million.
Chief executive Doug Jones said demand across its retail networks, which include IGA and hardware operators Total Tools and IHG, have remained strong over the past few weeks despite rising interest rates hitting overall consumer confidence.
Pandemic-related lockdowns helped drive shoppers to IGA stores over the past few years, and Metcash highlighted that the business had retained the majority of new consumers who started shopping with the company over the past few years.
Jones said investments in the group’s store network and IGA’s focus on local service and family-owned stores was resonating with shoppers.
“Our shoppers have been saying to us that, as they’ve rediscovered their community stores, they have really liked what they’ve seen … They are sticking around,” he said.
However, Jones acknowledged that successive interest rate rises and inflation were having an impact on consumers, resulting in a flat average “basket size”, or value of a typical transaction, in the company’s food business.
The company said food inflation averaged 7.6 per cent for the year, having hit a peak of 9.1 per cent in the third quarter.
A strong pipeline of construction projects also helped Metcash’s hardware portfolio, which saw total sales jump by 10.6 per cent to $3.4 billion for the 2023 year.
Sales at Power Tools retailer Total Tools increased by 61.9 per cent to $583.5 million.
The board declared an 11¢ final dividend to shareholders, bringing to total annual payout to 22.5¢ a share, a jump of close to 5 per cent on 2022’s payment.
Metcash shares closed at $3.59 on Friday.
Source: Thanks smh.com